Wall St. takes a swipe at AMR

[WorldTraveler]

Why not identify your sources for all to see?




Thank you.

I am familiar with those sites. One of them is run by a good friend of mine.

The issue is not where to find the data, but identifying the specific data sources used by a an arrogant and condescending poster ("If you want to learn, I'll teach you.")

this is a popular discussion website, not a doctoral dissertation. There is no standard here for expecting everything said to be documented with footnotes.

The invitation remains for you and others to ask where specific data I quote comes from and I'll be happy to share you.
Kev provided the general sources of the data but I will go one step further and note that this link provides more than enough evidence to support my contention that AA is at a serious disadvantage to not only its network peers but also every other major airline in the US.

http://www.airlinefinancials.com/uploads/Q3_2010_INDUSTRY_SUMMARY__parent_.pdf


These facts are plain to see:

The top of page 2 shows that AA's labor costs are more than 33% higher than DL and US's (LCC).
Total cost per available seat mile for AA is the highest among the major carriers (including low fare carriers that compete with network carriers) and AA is more than 15% higher than DL's a direct peer to AA.
The bottom of page 1 shows that AMR's margin is one of the lowest in the industry and DL's is the highest among network carriers.

Not only does this data specifically show AA's very disadvantaged position but it also shows that there is no hyperbole in saying that DL is doing things better than any other network airline.

 

[Veritas]

The invitation remains for you and others to ask where specific data I quote comes from and I'll be happy to share you.

As expected, you just keep stonewalling.

 

[WorldTraveler]

As expected, you just keep stonewalling.

I haven't stone walled on anything.. you have yet to ask for what data you want to know about.
If you are so aware of these websites, then I don't think there is any reason you don't know the answers, let alone be able to figure out where to look.

What is apparent is that you don't like the message so you would rather shoot the messenger when it is highly apparent that I have posted highly factual information.

When you and others are willing to take responsibility for understanding the situation at AA and finding solutions to turn it around, things can improve.

Playing childish games such as saying "I know where to look but I want someone to point out the specific page number" does nothing to demonstrate that you have have any desire to be a part of the solution.

But I honestly didn't expect that you personally would anyway.

 

[IberiaMAL]

I think AMR should focus their resources on Miami and Dallas first and foremost.

 

[Veritas]

I haven't stone walled on anything.. you have yet to ask for what data you want to know about.
If you are so aware of these websites, then I don't think there is any reason you don't know the answers, let alone be able to figure out where to look.

What is apparent is that you don't like the message so you would rather shoot the messenger when it is highly apparent that I have posted highly factual information.

When you and others are willing to take responsibility for understanding the situation at AA and finding solutions to turn it around, things can improve.

Playing childish games such as saying "I know where to look but I want someone to point out the specific page number" does nothing to demonstrate that you have have any desire to be a part of the solution.

But I honestly didn't expect that you personally would anyway.

It has nothing to do with liking your so-called analysis or your message of doom and gloom.

You don't really expect every reader to research each one of your posts to determine whether or not it is factually accurate, or do you?

Credible posters inform their readers where they obtained the information on which they relied in making their points. No, it does not have to be academic citations, just something along the line of "according to so and so...”

I know Bob Herbst of AirlineFinancials.com; I see him and talk to him regularly. He does not see eye to eye with you when it comes to the future of American Airlines.

 

[eolesen]

I guess that means Bob's just whistling thru the graveyard, too...

 

[tech2101]

It has nothing to do with liking your so-called analysis or your message of doom and gloom.

You don't really expect every reader to research each one of your posts to determine whether or not it is factually accurate, or do you?

Credible posters inform their readers where they obtained the information on which they relied in making their points. No, it does not have to be academic citations, just something along the line of "according to so and so...”

Agreed. It is really not difficult to cite sources. All credible posters here do it on a regular basis. It does not have to be in APA or MLA format; just post a link or at least try to attribute the information to the original author. It is courteous...to not plagiarize.

 

[boston]

I just read the Morgan Stanley Research "Airlines" March 27,2011, and the sky isn't falling for AMR/AA . I'll see what I can do to post it, it's a lot of info of all the airlines.

AMR/AA

" Well run airline, has long history of avoiding potential liquidity squeezes in down turns"

No where did it mention potential Bk.

 

[WorldTraveler]

I just read the Morgan Stanley Research "Airlines" March 27,2011, and the sky isn't falling for AMR/AA . I'll see what I can do to post it, it's a lot of info of all the airlines.

AMR/AA

" Well run airline, has long history of avoiding potential liquidity squeezes in down turns"

No where did it mention potential Bk.

I have long said that AMR has been a well run airline and that they have managed to find debt to cover their losses.

But this analysis by Fitch does show that AMR is in a uniquely worse situation than other carriers....

"AMR faces some uniquely difficult challenges due to its position as the U.S. legacy carrier with the highest unit labor costs. In order to move from the bottom of the pack in margin potential and cash flow generation, it needs to either deliver a larger RASM premium relative to the other legacy carriers or push unit costs lower. Neither outcome is likely in the near term as AMR is lagging the industry on RASM growth in 1Q'11 and management remains locked in a struggle with the unions over new contracts that could push labor costs still higher. With the majority of U.S. airline collective bargaining agreements amendable by 2012, AMR hopes to bridge the cost gap as pay rates at other carriers rise.


"AMR is facing another year of substantially negative free cash flow, and leverage is likely to move higher this year in response to fuel-driven operating weakness. Fixed cash obligations are large, with planned capex of $1.6 billion this year (about $1.1 billion of that total is tied to new aircraft deliveries) and scheduled debt maturities of $2.5 billion. Cash pension payments are expected to total $520 million this year (versus $640 million in accrued pension expense). Given these heavy cash obligations and the need to continue a multi-year fleet renewal program, AMR will not be in a position to begin reducing debt levels until solid RASM growth and moderating fuel prices push operating margins back to levels seen in 2006 and 2007 (the peak of the last demand cycle). "

http://finance.yahoo.com/news/Fitch-Affirms-AMR-Corp-and-bw-1640012681.html?x=0&.v=1

Given AMR's relatively strong cash position, they do have a ways to go before they are forced to file for BK... but they also have huge amounts of cash that will be needed this year for debt maturities, although that debt could possibly be refinanced, even if on worse terms.

What your assessment fails to recognize is that AMR continues to significantly underperform its peers on practically every measure of corporate financial performance. At some point, there will be no more money available to continue to cover AMR's losses.

Further, as I have noted elsewhere, AA"s competitors are aggressively entering AA's core markets because AA is very poorly positioned to defend itself. That is precisely why AA's RASM growth is trailing the industry - and the difference will grow as AA's top revenue markets no longer deliver the revenue that AA has counted. When the numbers start to show much larger declines in revenue up against an already elevated cost basis and further cost pressures such as from higher fuel prices, it may be too late for AA to act - and you as employees will have no choice but to incur major pay cuts or layoffs.

Wall Street analysts don't make 18-24 month forecasts because they can only use the information the company provides, which rarely goes out more than 9-12 months.

Given that AA's labor contracts are nowhere near close to being resolved, there is no assurance that the situation will improve anytime soon.

I'm not talking about the bottom falling out in the next 9-12 months unless a major financial stress hits the industry. But without resolving its labor contracts and bringing its costs in line with its competitors, I can assure you that AA will be significantly weakened one year from now. If you don't believe me, then let's check back a year from now and see....

If you and others are not afraid of pushing the company that far, you might want to consider EA, PA, and TW among others that thought they could demand a little more for a little longer - and it never worked out the way the employees hoped.

 

[Hopeful]

If you and others are not afraid of pushing the company that far, you might want to consider EA, PA, and TW among others that thought they could demand a little more for a little longer - and it never worked out the way the employees hoped.

EA? Where unions offered the cuts and concessions to Borman if he resigned? He said no and sold to Lorenzo...You know the rest...Where is EAL and where is Lorenzo?
PA? Not much left after PA raped the pension fund and still could not function. Who's fault was it that PANAM never built a formidable domestic system..

TWA? How many bankruptcies? The workers got jack squat in terms of gains. Icahn shovelled the dirt on that carrier.

You are not all correct in comparing what happened to those carriers to AA.

the managements at those carriers were by far the worst since deregulation set in.

 

[AV1]

If you and others are not afraid of pushing the company that far, you might want to consider EA, PA, and TW among others that thought they could demand a little more for a little longer - and it never worked out the way the employees hoped.

Please tell me how the employees of TW pushed the demand a little more for a little longer. I would be very interested in reading that. You have no clue what your writing with that last paragraph. Really, if you don't know something, don't just be making it up for posting.

 

[Hopeful]

Please tell me how the employees of TW pushed the demand a little more for a little longer. I would be very interested in reading that. You have no clue what your writing with that last paragraph. Really, if you don't know something, don't just be making it up for posting.

Utter nonsense. Wonder where WT came up with that!

 

[eolesen]

WT's characterization of EA's employees making demands is almost as laughable as some of his defending DL in the DL forum lately.

Every one of the unions, even the IAM, was offering concessions while Lorenzo was shifting assets out of the company. Every time they had a TA, Lorenzo lowered the bar. Repeatedly.

 

[Kev3188]

PA? ...Who's fault was it that PANAM never built a formidable domestic system..

I thought they weren't allowed to under regulation, which is why they wound up buying National to do so (which turned out to be bad timing, since if they'd have waited just a bit longer, they could've done what they wanted post-deregulation).

No?

 

[Hopeful]

I thought they weren't allowed to under regulation, which is why they wound up buying National to do so (which turned out to be bad timing, since if they'd have waited just a bit longer, they could've done what they wanted post-deregulation).

No?

Deregulation set in 1978....PanAm bought National in 1980. That didn't do much for the since Eastern controlled the Eastern and northeasten corridor.
Thir focus had always been on The World....trying to compete after deregulation was hard enough, but with People's Express and Air Florida in the mix, the National deal turned out not to be so good after all. The two low cost carriers also invaded eastern territory.

The point is that WT is putting some of the blame on those now defunct airlines's union demands. That was not the case with respect to their demise.